New Delhi: Petrol and diesel prices in many states fell sharply on Friday as more states announced Value-Added Tax (VAT) cuts after the Centre's move to slash excise duty levied on fuel.
The reduction in excise duty by the Centre, followed by a reduction in VAT in several states, has led to a sharp drop in petrol and diesel rates after they had reached a record high.
While some experts feel that petrol and diesel prices may continue to rise due to firming global crude oil rates, the recent price cut is expected to provide much needed relief to citizens and businesses.
Buckling under pressure, the Union government had on Wednesday cut excise duty on petrol by ₹ 5 per litre and that on diesel by ₹ 10 a litre to give reprieve to consumers battered by record-high retail fuel prices.
This announcement was matched by 22 states and Union Territories cutting Value-Added Tax rates in different proportions.
This has led to BJP and its partner ruled states witnessing steeper reductions in petrol and diesel prices in comparison to Maharashtra, Delhi, West Bengal and other states that are governed by other political parties, according to a price chart of different locations prepared by state-owned oil firms.
The additional reduction, on top of the excise duty cut, is the lowest in Uttarakhand because of lower duty cuts and the highest in Ladakh. On petrol, the price reduction over-and-above excise reduction ranges from ₹ 1.97 per litre in the case of Uttarakhand to ₹ 8.70 in the case of Ladakh.
For diesel, the additional reduction warranted by Value-Added Tax cuts, ranging from ₹ 17.5 a litre in Uttarakhand to ₹ 9.52 in the case of Ladakh.
The states that extended additional Value-Added Tax benefits are Karnataka, Puducherry, Mizoram, Arunachal Pradesh, Manipur, Nagaland, Tripura, Assam, Sikkim, Bihar, Madhya Pradesh, Goa, Gujarat, Dadra & Nagar Haveli, Daman & Diu, Chandigarh, Haryana, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Uttar Pradesh and Ladakh.